The Ministry of Commerce has directed sugar refining and marketing enterprises to be prepared to cope with the increased demand during Ramadan, and to provide a smooth supply.
Commerce ministry's directive came from a meeting at the office of the Export Competitiveness for Jobs project (EC4J) in Banglamotor on Monday, December 30.
The secretary of the commerce ministry, Dr Md Jafar Uddin, chaired the event. The meeting discussed the international sugar market, the current supply situation, local market conditions and which companies are producing sugar.
"There is no chance of a crisis for two-and-a-half months given the amount of sugar the companies have in stock. The companies have been directed to be prepared in advance to cope with the increased demand during Ramadan. Although companies take extra preparations every year on the occasion of Ramadan, the price of sugar still goes up every year. Instructions have been given to avoid such a situation in 2020," said the sugar producers at the meeting.
The chairman of the Tariff Commission, Tapan Kanti Ghosh, told The Business Standard: "Sugar producers have been told to prepare in advance to meet the increased demand in Ramadan. There must not be a shortage in supply before Ramadan."
"The companies were asked what stock they had. They said they can meet the demand for two and a half months with the stock they presently have," added Tapan Kanti Ghosh.
Production of sugar in government owned sugar mills were also discussed in the meeting.
In the 2018-19 fiscal year, the mills produced 68,600 tonnes of sugar. Till October of the 2019-20 fiscal year, the production was 34,555 tonnes. The mills are currently running at full swing given the production season.
According to the Ministry of Commerce, Bangladesh has an annual demand for 16-18 lakh tonnes of sugar.
Meanwhile, there is already some instability in the local sugar market. Many companies have started selling packaged sugar for Tk72 per kg, up from Tk65.
Unpackaged (loose) sugar is being sold for Tk65-66 per kg, up from around Tk60 even a few days ago.
Sugar traders say that the increase in the import tariff of sugar in the last budget, imposition of advance tax on import of unrefined sugar and the price of sugar in the international market has resulted in the increased price of sugar in the local market.
According to a Reuters report, the price of sugar in the international market has risen by six percent in the past one year. Currently, sugar is being sold for $361 per ton in the international market.
The commerce ministry says that the price of sugar in the local market has increased by 15 percent in the last one year. However, the Trading Corporation of Bangladesh says sugar prices have risen more than 23 percent in a year, and the increase was more than 7.5 percent in the last one month alone.
"There are some reasons for the price hike. But one has to check how much it has actually increased, and how much it should have increased. It will be discussed in the commerce ministry's next meeting on the prices of goods," said Tapan Kanti Ghosh when asked about the increased sugar price.